Tata Sons wants to end partnership with AirAsia, keen to focus on Vistara, Jet Airways

Talks are in preliminary stage to end association with AirAsia. Besides, Tata Sons is keen to acquire a majority stake in India’s second-biggest airline Jet Airways

Tata Sons is weighing options to terminate its partnership with AirAsia Bhd in an attempt to fully focus on one airline business, Vistara, the joint venture with Singapore Airlines (SIA), reported the Economic Times citing several unidentified people aware of the development. 

The financial daily mentioned that talks are in a preliminary stage to end association with AirAsia. Besides, the Mumbai-based conglomerate is keen to acquire a majority stake in India’s second-biggest airline Jet Airways. 

The publication quoted one of the people as saying that the Tatas proposing to “exit AirAsia India and run the only full-service private airline in India, which is Vistara-plus-Jet". Tata Sons holds 51 per cent of AirAsia India while 49 per cent held by Malaysia-based AirAsia Bhd.

It may be noted that the Central Bureau of Investigation (CBI) had last year registered a case against low-cost airline Air Asia Group CEO Tony Fernandes and others over alleged violation of norms for getting international flying licenses. 

With the CBI investigation against him,  it is getting tough for “Tony to do business in India”, the daily quoted one of the persons cited above as saying. 

The Tatas having a full-service carrier — Vistara merged with Jet — and an equivalent of SIA’s low-cost airline Scoot, which last year absorbed budget carrier Tigerair is one of the options being considered, as per the report.

Meanwhile, the board of Tata Sons will meet on Friday to discuss a plan to buy cash-strapped Jet Airways. Tata Sons chairman N Chandrasekaran is keen on the proposed deal and will reportedly make a business viability plan to the board. 

Many analysts are of the view that if the deal materialises, the Tatas which could convert the country's largest conglomerate from an airline minor player into a major, full-service international airline.

Earlier this week, Jet Airways posted a consolidated net loss of Rs 1,261 crore for the September quarter and is immediately in need for capital infusion to sustain its operations.